BASSETERRE, St. Kitts, March 25, 2021 (Press Unit in the Office of the Prime Minister) – After its successful readings in the National Assembly on Thursday, March 25, the Companies (Amendment) Bill, 2021 was unanimously passed, bringing St. Kitts and Nevis even more in line with best practices within the international financial services sector.
The Bill was moved through the House by Prime Minister and Minister of Finance, Dr. the Honourable Timothy Harris.
In his presentation, Prime Minister Harris said it was necessary for his Government to re-examine the nature of the Companies legislation and seek ways in which it could reasonably and sustainably adjust to the imperatives and complexities of doing business within the global sphere.
He said, “This Bill therefore seeks to introduce a new feature in our Companies Act which it is anticipated would provide attractive business and investment opportunities within our jurisdiction while at the same time satisfying the international standards on taxation. Mr. Speaker, the Bill therefore seeks to remove the tax exemption elements from the Companies Act. In short, the term ‘exempt company’ would no longer be valid after June 20, 2021.”
A new product, referred to as an international company was introduced as part of the Bill in order to keep the Federation competitive. An international company is defined as a body corporate which is incorporated in Saint Christopher, but whose mind and management are outside of the Federation.
The prime minister said, “This kind of company Mr. Speaker, would have no permanent establishment here. If approved by this Honourable House, this proposed new product would be more in line with the requirements of the OECD [Organisation for Economic Co-operation and Development] and the EU [European Union], since the tax exemption features would have been completely excised from the legislation,” the prime minister said.
Prime Minister Harris further noted that the legislation outlines the different options that are now available to those persons who formerly had exempt companies in St. Kitts but would now be required to deal with them before the June 20 deadline.
“In that regard Mr. Speaker, Clause 10 of the Bill makes provision for exempt companies to be converted to an ordinary company. Mr. Speaker it would be proposed at Committee stage to also clearly include the option of conversion to an international company. In other words, there will now be two options introduced to take care of the removal of the exempt companies provision in the Act – a term or terminology which the international marketplace at the level of the regulatory arm has found to be offensive,” the prime minister said.
Prime Minister Harris stated that allowing exempt companies to convert to international companies is aimed at providing a reasonable measure to make the process less onerous and costly for those involved.
]]>BASSETERRE, St. Kitts, November 17, 2020 (Press Unit in the Office of the Prime Minister) – By making the necessary legislative amendments now, the Government of St. Kitts and Nevis is ensuring that the twin-island Federation is never again listed as a non-cooperative tax jurisdiction – a classification that causes significant reputational damage to listed nations.
“A blacklist is a signal to the rest of the world, with whom you are engaged, that something is awry with some aspect of the governance agenda. Therefore Mr. Speaker, we will not chance those things. We have come a long way. We have, in the past, been blacklisted on several occasions and those who had been involved know how hard and difficult it was to move from that dissent to a place again of recognition as one who was cooperating with the good governance agenda,” said Prime Minister and Minister of Finance, Dr. the Honourable Timothy Harris, during the Tuesday, November 17 Sitting of the National Assembly.
In February of this year, St. Kitts and Nevis was removed from the European Union’s (EU) List of Non-Cooperative Jurisdictions. The European Council stated that the Federation of St. Kitts and Nevis has “managed to implement all the necessary reforms to comply with EU tax good governance principles ahead of the agreed deadline and [is] therefore removed from Annex II.” Annex II is referred to as the grey list while Annex I is called the blacklist.
“It meant that in December [2019] after the Budget, we had to go to the Parliament again to meet certain deadlines so as to ensure that by the official deadline they had given by the end of the year, our legislative framework was consistent with their expectations. So we have come a long way to get where we are, and it would be foolish if having worked so diligently over this long stead to get us back to where we ought to be at the apex of highly performing countries that we would allow any stubbornness to take us back down from whence we came,” the prime minister said.
The Government of St. Kitts and Nevis today tabled before the National Assembly the Income Tax (Amendment) Bill, 2020 which seeks to bring clarity to the existing legislation. The Bill will provide the entities operating in the Financial Services Sector and other sectors of the Federation’s economy with the clarity and certainty they require to continue to operate with confidence, to grow and to increase their contribution to the economic advancement of the Federation.
Prime Minister Harris said the amendments to the Bill will further ensure full compliance with international good governance standards and will ensure that St. Kitts and Nevis meets its commitments to the EU and the Organisation for Economic Co-operation and Development (OECD), and in so doing, avoid the reputational damage.
]]>BASSETERRE, St. Kitts, November 17, 2020 (Press Unit in the Office of the Prime Minister) – Prime Minister and Minister of Finance, Dr. the Honourable Timothy Harris, has reaffirmed that the Government of St. Kitts and Nevis has no intention of introducing Personal Income Tax or increasing Corporate Income Tax.
The prime minister made this statement during the Tuesday, November 17 Sitting of the National Assembly in response to the misinformation that is presently in the public domain surrounding the tabling of the Income Tax (Amendment) Bill, 2020.
Prime Minister Harris said the Amendments to the Bill seek to clarify the application of taxation to ensure full compliance with international good governance standards.
“Specifically, Mr. Speaker, the Amendments will ensure that we meet our commitments to the EU and the Organisation for Economic Co-operation and Development (OECD) and avoid the reputational damage and consequential financing costs which come with blacklisting. As a responsible Government and highly respected member of the international community my Government cannot shirk from our obligations even when they are inconvenient,” Dr. Harris stated.
The prime minister further noted that this is not the first time legislative amendments are being made in St. Kitts and Nevis in response to changing international regulations and practices.
Prime Minister Harris said, “Over the last 20 plus years, the country’s National Assembly has had to make amendments to a range of Tax regimes that was deemed inconsistent by the EU or OECD. At the level of the Nevis Island Assembly, it too has had to respond with amendments to the Nevis Business Corporation Ordinance and the Nevis Limited Liability Company Ordinance in order to ensure compliance with international tax good governance principles.”
“Our efforts over the last four years to act in a timely manner led to St. Kitts and Nevis in February 2020 being removed from the EU’s list of non-cooperative jurisdictions,” Dr. Harris added.
The honourable prime minister said the records will show that his Team Unity administration over the last five years has managed the country well, achieving unprecedented surpluses year after year, without introducing one single new Tax measure.
“We are a Government disposed to keeping taxes low. The record is also pellucidly clear that for the last five years my Team Unity Government has not introduced any new taxes. Instead, we have reduced the tax burden of our people by removing VAT from all food items, educational supplies and funeral expenses. Mr. Speaker, we went even further and more recently, as part of our stimulus package in response to the negative impact of COVID-19, we have instituted a series of tax breaks for the benefit of taxpayers large and small,” Prime Minister Harris said.
The Government’s comprehensive stimulus package provided for the removal of VAT and Import Duty on additional hygiene items and the removal of Import Duty and Customs Service Charge on selected food items for a period of six months; reducing the Corporate Income Tax rate from 33 percent to 25 percent, and reducing the Unincorporated Business Tax rate by 50 percent, from 4 percent to 2 percent, for a period of six months.
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